U.S. stock markets reacted on Monday to warnings from CEOs in the AI industry who called for a slowdown in the development of this revolutionary technology. Early in the trading session, the Nasdaq 100 index, which tracks 100 large non-financial companies on the Nasdaq exchange, fell by 1.8 percent. Meanwhile, the Nasdaq Composite dropped by 1.3 percent and the S&P 500 fell by nearly 1 percent. However, a rise in software and cybersecurity stocks helped major indexes recover from their lows.
Trump's Reaction to the Warnings
By 2 PM Eastern Time, the Nasdaq Composite had nearly returned to positive territory for the day, and the S&P 500 was down only 0.3 percent. President Donald Trump ignored these warnings in more than seven social media posts throughout the day, signaling to investors that the likelihood of serious action at the federal level was very low. Trump wrote, "AI dominating the world and destroying humanity and other bad things is a hoax." He compared the AI warnings to investigations into his communications with Russia and two impeachments during his first term. He emphasized that "AI will not be stopped during his presidency."
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Market Volatility and Response to the Decline
Nevertheless, shares of Nvidia, the world's most valuable public company, fell by about 3 percent. Chipmaker Arm Holdings dropped by 8 percent, while other peers such as ASML, Marvell, and Intel fell by more than 4 percent. Applied Materials, a key supplier for chip companies, declined by over 6 percent, and Micron Technologies similarly dropped. CoreWeave, a key supplier of data centers and cloud computing for AI companies, also fell by 4.5 percent. The Dow Jones Industrial Average only dropped by 100 points, but shares of Caterpillar, which is active in building AI data centers, fell by 4 percent. The Philadelphia Semiconductor index also decreased by 5 percent.
Future Outlook and Expert Opinions
Sam Altman, CEO of OpenAI, stated in an interview with Fortune magazine that the company will not go public this year. He said, "Given everything happening in the safety space, now is not the right time for a public offering." OpenAI and Anthropic's public offerings are expected to be among the largest in history. Jim Reid, global head of macro research at Deutsche Bank, said, "The key question for the markets is whether this is a sign of a slowdown in the extraordinary investment cycle in AI or not." It does not seem that this will happen anytime soon.
Concerns about a slowdown in the AI industry also affected South Korea's Kospi index, which fell by more than 3 percent. This decline was mainly due to selling in AI memory companies. Shares of Samsung Electronics dropped by 5 percent and SK Hynix fell by more than 7.3 percent. In Tokyo, shares of SoftBank Group, an investor in OpenAI, decreased by 10.7 percent. Market volatility began on Saturday when Dario Amodei, CEO of Anthropic, wrote in a public post that AI companies should slow down the advancement of AI model capabilities. He also pointed to the serious risks that this technology entails.
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